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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into as of
the 20th day of July, 1998 (the "Commencement Date"), by and between SPELLING
ENTERTAINMENT GROUP INC., a Delaware corporation ("Employer"), and XXXX X.
XXXXXXXXX ("Employee"). The parties agree to the following:
1. Duties
Employer engages Employee to serve in the capacity of Senior
Vice President - Chief Financial Officer, reporting to the President of
Employer, or such other persons as Employer may later designate. During the term
of this Agreement, Employee shall perform the duties and responsibilities as
shall from time to time be reasonably delegated or assigned to Employee by
Employer. Employee agrees to devote Employee's entire time, attention and
energies to the business of Employer during business hours. Employees principal
place of business shall be in the Los Angeles metropolitan area, although
Employee may render services in other locations as Employer may request from
time to time (i.e. ordinary business travel).
2. Employment Term
2.1 Employment of Employee. Subject to the termination
provisions of this Agreement, Employer hereby employs Employee under the terms
and conditions set forth in this Agreement for a period of two (2) years,
commencing on the Commencement Date and terminating on July 19, 2000 (the
"Employment Term").
2.2 Employment Relationship. Employee and Employer acknowledge
and agree that Employer has no obligation or duty to renew, extend or negotiate
for the renewal or extension of the employment relationship beyond the
Employment Term. Should the employment relationship continue after the
Employment Term without a new employment contract, the employment during such
period shall be at will, so that either Employer or Employee may terminate the
employment at any time. Employer shall provide Employee with four (4) months
written notice (or four (4) months Base Salary in lieu of notice) if Employer
does not intend to renew or extend the employment relationship after the
Employment Term.
3. Compensation
3.1 Base Salary. As compensation for the performance of
Employee's obligations hereunder, Employer shall pay Employee a base salary
("Base Salary") during the Employment Term as follows:
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(a) Two Hundred Sixty-Five Thousand Dollars ($265,000) during
the first year of the Employment Term.
(b) Two Hundred Eighty-Five Thousand Dollars ($285,000) during
the second year of the Employment Term.
(c) All compensation under this section shall be payable in
accordance with Employer's normal practices.
3.2 Bonus Compensation. In addition to Employee's Base Salary,
Employee shall be entitled to receive bonus compensation for each of the
calendar years Employee is employed by Employer hereunder, determined and
payable as follows ("Bonus"):
a) Employee's Bonus for each of the calendar years Employee
is employed by Employer hereunder will be based upon a measurement of
performance against objectives in accordance with Employer's Short-Term
Incentive Plan, as the same may be amended from time to time.
b) Employee's Target Bonus for each of the calendar years
Employee is employed by Employer hereunder will be 40% of Employee's Base Salary
which may be prorated for any partial calendar year during the Employment Term
except for calendar year 1998.
c) Employee's bonus for any calendar year shall be payable
by February 28 of the following year.
4. Benefits
4.1 Expenses. Employer agrees to pay or reimburse Employee for
reasonable and necessary business expenses in accordance with Employer's general
policies for employees of similar stature.
4.2 Medical, Insurance and Other Benefits. During the Employment
Term, Employee shall be entitled to participate in all benefit plans available
to other employees of Employer of similar stature, including, without
limitation, any stock option plan (together with applicable option, vesting,
exercise and termination provisions or any long term incentive plan), or group
medical, dental, disability or any other benefits, as such plans or benefits may
be established or modified from time to time in Employer's sole discretion.
4.3 Vacation. During the Employment Term, Employee shall be
entitled to four (4) weeks vacation per year in accordance with the policies
established from time to time by Employer.
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4.4 Pension. Employee shall be eligible to participate in
Employer's 401(k) plan offered to its employees, on the same terms and
conditions applicable to all employees of similar stature under the plan.
4.5 Car Allowance. During the Employment Term, Employee shall
receive a car allowance in the amount of $600 per month.
5. Termination For "Cause"
(a) Employer may terminate Employee's employment for "cause" as
defined in this Section at any time upon written notice to Employee. As used
herein, the term "cause" shall mean any one or combination of the following:
(i) Employee's conviction of any crime (whether or not
involving Employer) which constitutes a crime of moral turpitude or is
punishable by imprisonment of one year or more.
(ii) Any act or omission by Employee involving willful
malfeasance or willful gross negligence, or constituting a material
breach of this Agreement.
(iii) Employee's omission or act constituting fraud,
dishonesty or misrepresentation, whether prior or subsequent to the date
hereof, including, without limitation any fraud, dishonesty or
misrepresentation relating to Employee's hiring by Employer.
(iv) Employee's failure, inability (which does not qualify
as a disability under federal or state law), or refusal to perform
Employee's duties pursuant to this Agreement.
(v) Employee's violation of any material rule or regulation
of Employer applicable to other employees of similar stature.
Employee shall not be deemed in breach of provisions 5(iv) or 5(v)
unless and until Employer shall have given Employee written notice describing
the breach and Employee shall have failed to cure that breach within ten (10)
business days after Employee's receipt of that written notice, provided further
that there shall be no cure period with respect to any matter incapable of being
cured.
(b) Good Reason Termination. Employee may terminate his employment
hereunder for "Good Reason" at any time during the Employment Term by written
notice to Employer not more than thirty (30) days after the occurrence of the
event constituting "Good
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Reason". Such notice shall state an effective date no later than ten (10)
business days after the date it is given. Good Reason shall mean, without your
prior written consent, other than in connection with the termination of
Employee's employment for "cause" (as defined above) or in connection with your
permanent disability, the assignment to you by Employer of duties substantially
inconsistent with your positions, duties, responsibilities, titles or offices,
the withdrawal of a material part of your responsibilities as set forth in
Section 1, or the material breach by Employer of its material obligations
hereunder.
6. Termination Without "Cause"
If Employee's employment is terminated by Employer without
cause, as "cause" is defined in Section 5 hereof, Employer shall, except as
otherwise provided below, pay to Employee the compensation described in Section
3, medical and dental coverage, life insurance, and car allowance for the
balance of the Employment Term. However, Employee shall have the obligation to
use good faith and best efforts to seek alternative employment. Employer shall
be entitled to reduce the amount of any compensation and applicable benefits
payable to Employee under this Agreement by the amount of salary, bonus and/or
benefits or other compensation of any kind earned or received by Employee from
any third party and/or any such amounts, compensation or benefits earned through
self employment from the date of termination through the end of the Employment
Term.
7. Offset
Employee authorizes and agrees that Employer retains the right
of offset and may deduct from the compensation payable to Employee under this
Agreement the amount of any debts owed by Employee to Employer including, but
not limited to, any outstanding loans, unpaid advances, and the value of any
Employer property retained by Employee.
8. Confidentiality
8.1 Non-Disclosure of Company Information. During the term of
Employee's employment and thereafter, Employee shall keep in confidence and
shall not use for Employee or others, or divulge to others, any secret or
confidential information pertaining to the business of Employer or its
affiliates including, without limitation, knowledge, data or plans of Employer
or its affiliates, including, without limitation, matters of a business nature
such as information about costs and profits, projections, personnel information,
records, customer lists, contact persons, customer data, software, sales data,
or matters of a creative nature, including without limitation, matters regarding
ideas of a literary or dramatic nature, or regarding any form of motion pictures
or television product ("Company Information"). Company Information shall be
considered and kept as the private, proprietary and confidential information of
Employer and may not be divulged without the express written authorization of
Employer.
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8.2 Return of Records. All records, files, lists, drawings,
documents, models, equipment, software or intellectual property relating to
Employer's business shall be returned to Employer upon the termination of
Employee's employment. This Section does not apply to Employee's personal
rolodex.
8.3 Irreparable Harm. Employee acknowledges and agrees that any
breach of this provision could cause irreparable harm to Employer, and would
entitle Employer to enjoin unauthorized disclosure of Company Information.
9. Conflict of Interest
9.1 Restriction on Use of Title. Employee shall not use, or
allow the use of, Employee's title or the fact of Employee's employment or
affiliation with Employer or any of its affiliates in connection with any
activities or endeavors which are not directly related to the performance of
Employee's duties under this Agreement without the prior written approval of
Employer.
9.2 Investment Limitation. During the Employment Term, Employee
shall not become financially interested in, or associated with, directly or
indirectly, any third party in connection with the production, distribution or
exhibition of motion pictures, television programs, sound recordings, theatrical
plays, any visual and/or audio recordings of any kind, or any other
entertainment related business or activity without the prior written approval of
Employer; provided, however, that this provision shall not prevent Employee from
(i) holding a passive or beneficial interest in any third party which is not a
competitor of Employer or any of its affiliates or (ii) holding a passive or
beneficial interest not exceeding one percent (1%) of the outstanding stock of
any publicly traded corporation whether or not such publicly traded corporation
competes with Employer or any of its affiliates.
10. No Solicitation of Employees
Employee shall not during the term of employment with Employer
or for a period of one (1) year thereafter induce or attempt to induce any
employees or representatives of Employer (or those of any of its affiliates) to
stop working for or representing Employer or any of its affiliates in order to
work for or represent any of Employer's competitors. The provisions of this
Section shall survive the expiration, termination or rescission of this
Agreement.
11. Ownership of Intellectual Property
11.1 Agreement to Transfer Intellectual Property. Employer shall
own, and Employee hereby transfers and assigns to it, all rights, of every kind
and character throughout the world, in perpetuity, in and to any material or
ideas and all results and proceeds of Employee's services hereunder, or
conceived of or produced during the term and in the course
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of Employee's employment, whether the same consists of literary, dramatic,
musical, motion picture, mechanical, or any other form of works, themes, ideas,
inventions, creations, products or compositions.
11.2 Execution of Assignment Documents. Employee agrees to
execute and deliver to Employer such assignments, certificates of authorship, or
other instruments in accordance with standard industry practice as Employer may
require from time to time to evidence ownership of the results and proceeds of
Employee's services hereunder. Employee's agreement to assign to Employer any of
Employee's rights as set forth in this Section does not apply to any invention
which qualifies fully as Employee's invention under the provisions of Section
2870 of the California Labor Code, where no equipment, supplies, facility, or
trade secret information of Employer was used and which was developed entirely
upon Employee's own time, and which (i) does not relate to the business of
Employer or to its actual or demonstrably anticipated research or development,
or (ii) which does not result from any work performed by Employee for Employer.
11.3 Status of Ownership of Copyrights. Employee represents and
warrants that except as previously disclosed to Employer in writing, Employee
neither owns nor controls any copyrights, patents, literary rights, contract
rights, or other rights in any literary, dramatic work, musical work or any
concept or idea which could be the basis for a television program, feature film,
video or other motion picture or copyrightable product.
12. Exclusive Services
Employee agrees not to perform services of any kind or nature
which would interfere with the performance of Employee's services hereunder for
any third party or render services for Employee's own account which would
interfere with the performance of Employee's services hereunder.
13. Unique Personal Services
Employee agrees and acknowledges that Employee's personal
services are of a special, unique, unusual, extraordinary, and intellectual
character giving them a peculiar value, the loss of which Employer cannot be
reasonably compensated for in damages in an action at law. Therefore, in the
event of the breach by Employee of this Agreement, Employer shall, not
withstanding the provisions of Section 23 below, be entitled to make application
to a court of competent jurisdiction for equitable relief by way of injunction
or otherwise. This provision shall not be construed as a waiver of any of the
rights which Employer may have for damages under this Agreement or otherwise,
and all of Employer's rights and remedies shall be unrestricted.
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14. Acknowledgment of Section 508
Employee acknowledges that Employee is familiar with the
requirements of Section 508 of the Federal Communications Act (regarding the
acceptance or payment of money or other consideration for the inclusion of
program matter), is aware that the violation of Section 508 constitutes a
criminal offense, has not violated and will not violate any of the provisions of
Section 508, and has not and will not do any act which would require disclosure
pursuant to Section 508.
15. Equal Opportunity Employer. Employee acknowledges that Employer
is an equal opportunity employer. Employee agrees that he will comply with
Employer's policies and applicable federal, state, and local laws prohibiting
discrimination on the basis of race, color, creed, national origin, age, sex or
disability.
16. Disability
If employee becomes "Materially Disabled" (as defined in this
Section) during the Employment Term, Employer may, at its election, terminate
this Agreement, except that Employee's obligations under Sections 8, 10 and 11
of this Agreement shall survive any such termination. "Materially Disabled"
shall mean any instance where Employee becomes unable, as a result of a serious
health condition (other than a pregnancy-related disability), to render full
services as contemplated by this Agreement for any period totaling more than
sixteen (16) weeks in the aggregate during any twelve (12) month period.
17. Death
In the event of Employee's death, this Agreement shall
terminate, and Employer shall thereupon be released and discharged from all
further obligations under this Agreement, except for any vested benefits and
unpaid earned Base Salary for time worked and pro-rated Target Bonus in
accordance with Section 3.2 herein.
18. Complete Agreement
18.1 No other Agreements. This Agreement is the product of
negotiation between the parties hereto and supersedes all prior agreements, if
any, between Employer and Employee, and constitutes the entire agreement between
the parties.
18.2 Modification or Amendment. No amendment or modification of
this Agreement shall be valid or binding unless it is in writing and duly
executed by Employer.
18.3 No Third Party Representations. Employee acknowledges that
no person has made any representation or promise on behalf of Employer not set
forth herein and this Agreement has not been executed in reliance upon any such
representation or promise.
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19. Severable Agreement
If any provision of this Agreement is declared invalid, illegal,
or incapable of being enforced, all of the remaining provisions of this
Agreement shall nevertheless continue in full force and effect.
20. Notices
Any notice required or desired to be given to Employer or to
Employee shall be given in writing, and shall be addressed:
To Employer:
Spelling Entertainment Group Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx,
Senior Vice President - General Counsel,
Secretary and Administration
To Employee:
Xxxx X. Xxxxxxxxx
000 X. Xxxx Xxxxx, #000
Xxxxxxx Xxxxx, XX 00000
Notices given under this Section shall be given by hand delivery,
telecopy, registered mail or overnight courier.
21. Assignment
Employer shall have the right to assign this Agreement to any
subsidiary or affiliate or successor of Employer.
22. Employer's Affiliated Corporations
22.1 Employee acknowledges and agrees that all of Employee's
covenants and obligations to Employer, as well as the rights of Employer
hereunder, shall run in favor of and shall be enforceable by the parent,
subsidiary and affiliated companies of Employer.
22.2 Employee acknowledges that notwithstanding references in
this Agreement to the parent, subsidiary and affiliated companies of Employer,
this Agreement is
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between Employee and Employer and there are no other parties to this Agreement.
Employee shall have no right to enforce this Agreement against any other parent,
subsidiary and affiliated companies of Employer.
23. Indemnification. During the Employment Term, Employee shall
receive no less than the level of indemnification which Employee received under
Employer's by-laws as of the date of this Agreement.
24. Alternative Dispute Resolution
24.1 Binding Arbitration. Except for Employer's right to seek
equitable relief in accordance with the provisions of Sections 8, 10, and 13 of
this Agreement, the parties agree that all disputes, claims and other matters in
controversy arising out of or relating to this Agreement, or the performance or
breach thereof, shall be submitted to binding arbitration in accordance with the
provisions and procedures of this Section.
24.2 Arbitrator/Place of Arbitration. The arbitration provided
for in this Section shall take place in Los Angeles, California. The arbitration
will be held under the auspices of either the American Arbitration Association
("AAA") or Judicial Arbitration & Mediation Services, Inc. ("JoAoMoS"), with the
designation of the sponsoring organization to be made by the party who did not
initiate the claim.
Employer and Employee agree that, except as provided in this
Agreement, the arbitration shall be in accordance with the AAA's then-current
Model Employment Arbitration Procedures (if AAA is designated) or the
then-current JoAoMoS Employment Arbitration Rules (if JoAoMoS is designated).
The arbitrator shall be either a retired judge, or an attorney licensed to
practice law in the state in which the arbitration is convened ("the
Arbitrator").
The Arbitrator shall be selected as follows. The sponsoring
organization shall give each party a list of 11 arbitrators drawn from its panel
of employment dispute arbitrators. Each party may strike all names on the list
it deems unacceptable. If only one common name remains on the lists of all
parties, that individual shall be designated as the Arbitrator. If more than one
common name remains on the lists of all parties, the parties shall strike names
alternately from the list of common names until only one remains. The party who
did not initiate the claim shall strike first. If no common name exists on the
lists of all parties, the sponsoring organization shall furnish an additional
list and the process shall be repeated. If no arbitrator has been selected after
two lists have been distributed, then the parties shall strike alternately from
a third list, with the party initiating the claim striking first, until only one
name remains. That person shall be designated as the Arbitrator.
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The Arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the State of California, or federal law, or both, as
applicable to the claim(s) asserted. The Arbitrator is without jurisdiction to
apply any different substantive law, or law of remedies. The Federal Rules of
Evidence shall apply. Except as otherwise provided in this Agreement, the
Arbitrator, and not any federal, state, or local court or agency, shall have
exclusive authority to resolve any dispute relating to the interpretation,
applicability, enforceability or formation of this Agreement, including but not
limited to any claim that all or any part of this Agreement is void or voidable.
The Arbitrator shall have the authority to entertain a motion to dismiss and/or
a motion for summary judgment by any party and shall apply the standards
governing such motions under the Federal Rules of Civil Procedure. The
arbitration shall be final and binding upon the parties.
24.3 Arbitration Procedures
(a) Time and Place for Hearing. The parties shall mutually agree
upon the date and location of the arbitration, subject to the availability of
the Arbitrator. If no agreement can be reached as to the date and location of
the arbitration, the Arbitrator shall appoint a time and place, except that the
Arbitrator shall give not less than 30 days notice of the hearing unless the
parties mutually agree to shorten time for notice.
(b) Discovery. Each party shall have the right to take the
deposition of two (2) individuals and any expert witness designated by another
party. Each party also shall have the right to make requests for production of
documents to any party. The subpoena right specified below shall be applicable
to discovery pursuant to this paragraph. Additional discovery may be had only
where the arbitrator selected pursuant to this Agreement so orders, upon a
showing of substantial need. At least 30 days before the arbitration, the
parties must exchange lists of witnesses, including any expert, and copies of
all exhibits intended to be used at the arbitration. Each party shall have the
right to subpoena witnesses and documents for the arbitration.
(c) Arbitration Fees and Costs. Employer and Employee shall
equally share the fees and costs of the Arbitrator. Each party will deposit
funds or post other appropriate security for its share of the Arbitrator's fee,
in an amount and manner determined by the Arbitrator, 10 days before the first
day of hearing. Each party shall pay for its own costs and attorneys' fees, if
any. However, if any party prevails on a statutory claim which affords the
prevailing party attorneys' fees, or if there is a written agreement providing
for fees, the Arbitrator may award reasonable fees to the prevailing party.
(d) Award Final. The decision of the Arbitrator may be enforced
in any court of competent jurisdiction and shall not be appealable for any
reason.
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25. Counterparts
This Agreement may be executed in counterparts, each of which,
when so executed, shall be deemed an original, but all of which together shall
constitute one and the same instrument.
26. Governing Law
This Agreement shall be deemed made in the State of California,
County of Los Angeles, and shall be governed by the laws of the State of
California.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
SPELLING ENTERTAINMENT GROUP
INC.
(EMPLOYER)
By:_____________________________________
Its_____________________________________
XXXX X. XXXXXXXXX
(EMPLOYEE)
________________________________________
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